MARKETING

1. STRATEGIC MARKETING


1.1 DEFINITION AND BRIEF HISTORY OF MARKETING

§ Definition of marketing

Marketing involves a series of activities aimed at meeting the needs and aspirations of
the markets in exchange for a profit or profitability for existing companies that make use
of them. This is the reason for which there is no doubt that marketing is vital for the
success of a business, company, organization or the current market in general.

Therefore, it is very important that people who are part of the commercial area of a
company have a solid understanding of the definition of marketing, and are able to put
this knowledge into practice to derive benefits and be successful.

According to the American Marketing Association (AMA), professional marketing
organization, marketing is “an activity, set of institutions and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
partners, and society at large.”

Dr. Philip Kotler, considered the father of modern marketing, defines marketing as the
science and art of exploring, creating, and delivering value to meet the demands or
requirements of a target market at a profit. Marketing identifies the unsatisfied needs
and intentions. It defines, measures and quantifies the size of the identified market as
well as the profit potential. It indicates which segments the company is able to serve
best and designs and promotes the appropriate products and services.

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§ Brief historical outline of marketing

We can say that marketing already existed in the primitive era when humans lived in
caves and caverns and were self-sufficient. Over time, however, they started to socialize
with others, creating towns and villages which gave rise to one of the first markets:
exchanging goods or animals for merchandise and other products, thus creating the first
society with a market itself.

With the development and economic transformation that started during the industrial
revolution between 1760 and 1830, companies in Europe and the US became clearly
oriented towards production. It was at that moment when the market demand
exceeded the existing supply and the manufacturers entered into a "golden age"
because they were able to sell their products in large quantities, but without paying
attention to consumers. This happened because the private seller, factories or industries
produced what they wanted and the consumers bought it depending on their economic
status.
Due to the exaggerated increase in production, competition appeared. Supply was again
higher than demand. To remedy this situation companies decided to attack their
competitors and incorporate the sales department into their companies so as to get rid
of inventory due to overproduction and thus, have a balance on the current market.

Over time, sales came to a halt and the obligation to research and analyse the situation
arose. It was essential to avoid losses and better manage the demanded and offered
products or services. For the first time, carrying out research on the competition that
existed in the market, the types of consumers and their needs, the products and the
general market was proposed. It was at that moment when marketing was really born
as a concept: the way of conceiving and executing the terms of trade, so that it might be
satisfying for the parties involved as well as for society, through the development,
evaluation, distribution and promotion of goods that one of the parties carries out and
services or ideas that the other party needs.

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The American economist and professor of the prestigious Harvard Business School,
Theodore Levitt, in one of his most renowned articles published in 1950, presented a
concept that gave rise to marketing. It referred to gearing the products towards the
group of users who consume it. Since then, the efforts of organizations have been
focused more on the promotion of their products through the mass media that began
to appear: radio and television commercials, where the breaks in football matches were
perfect opportunities to advertise products or services.

Then Dr. Philip Kotler, considered the father of marketing and currently the most
prestigious and respected authority in this sector, established the foundations and
concepts of modern marketing. He defined this discipline as “the technique of business
administration which allows anticipating the structure of demand of the chosen market,
conceiving, promoting and distributing the goods or services that satisfy or stimulate it,
at the same time maximizing the profits of the company”.

Hubspot, one of the most important Inbound-Marketing software platforms, has divided
the history of marketing into six stages, from 1450 to the present, by providing figures
that show the change from traditional advertising (printing) to another type of
advertising, based on two-way communication, which seeks to attract users in an
attractive and modern way.

ü From 1450 to 1900: The printed advertisement appears
In 1450, Gutenberg invented the printing press which allowed the popularization of
printed texts for the first time in the history of mankind.
By 1730, the first magazines had appeared which intended to keep citizens up to date.
They served as a means of communication, and they were first published in the United
States, in Philadelphia (1741).

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ü From 1920 to 1949: The emergence of new media

In 1922 radio advertising began, and by 1933, more than half of US society, about 55%,
had devices to tune in to the radio in their homes. This means of communication had
become essential for keeping up with what was happening outside people’s homes and
for providing entertainment.

It was in 1941 when television appeared; a historical event for the contemporary age.
The Bulova Clocks brand, a company dedicated to producing luxury watches, was the
first commercial advertised on television. This advertisement reached up to four
thousand televisions and many people could see it for the first time from their homes.
The telephone was invented In 1946 and 50% of the households had one.

ü From 1950 to 1972: Marketing flourishes

In the mid-fifties television had a great impact on advertising. The publicity generated
by television brought much more income than the advertising broadcast on the radio or
present in newspapers or magazines. Telephone advertising fell by almost 10% in 1954;
television advertising, on the other hand, had an increase of 15% that year, making it
clear that it was one of the most profitable ways for companies to advertise their
products and/or services. It became a common and necessary skill for the brands of that
time to be able to establish a "relationship" with consumers or users.

In the 1970s, in 1972 to be more precise, the media suffered a weakening of one of its
marketing formulas for the first time: the outbound marketing which refers to a type of
marketing that reaches consumers through general media advertising and is focused on
one-way communication. The end of one of the most popular magazines of that time
was announced In the same year. It was the prestigious Life magazine, which had been
published for more than 30 years.

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ü From 1973 to 1994: The digital age emerges

Martin Cooper, researcher at Motorola, made the first phone call through a mobile
phone in 1973.

In 1981, IBM launched its first computer, and three years later the great company Apple
presented the new Macintosh in an advertisement broadcast during the Super Bowl in
the United States. The ad cost almost a million dollars and was seen live in 46% of
American homes.

Thanks to new technologies, for example, the invention of the computer, printed
advertising entered a new phase, a boom. In the eighties (1985), the income derived
from newspaper advertising reached 25,000 million US dollars. Between 1990 and 1994
there were great and significant advances in 2G technologies, which laid the foundations
for future invention and improvement of television through mobile phones.

It was at that time that TV surpassed newspapers and magazines as the leading
advertising medium for the first time. Between 1990 and 1998 the financing of television
through advertising went from 2.4 million to 8.3 million dollars.
In April 1994, the first case of spam in e-commerce appeared.

ü From 1995 to 2002: The dotcom bubble

Two of the biggest Internet companies, Yahoo! and AltaVista launched their search
engines in 1995. In 1997 Ask.com did the same but with its own search engine. In 1995,
only 0.4% of the world population used search engines because there were no
computers in most of the households. In December 1997, this figure reached 1.7%.

Between 1995 and 1997 the first concept of SEO (Search Engine Optimization) emerged:
search engine positioning, a technical process of increasing the quantity and quality of

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traffic to your website by obtaining a high-ranking placement in the search result page
of a search engine.

It was in 1998 when the new powerful Google and MSN search engines emerged. The
PPC (Pay Per Click) / Adwords was launched and seven years later, in 2005, the Google
Analytics platform was created.

It was also in 1998 when the concept of blogging emerged, thanks to Brad Fitzpatrick,
Evan Williams and Meg Hourihan, among others. In 1999 there were very few blogs on
the Internet, but by mid-2006 there were more than fifty million blogs worldwide;
anyone with a computer and Internet connection could create a blog. The Internet
offered many possibilities for advertising and marketing.


ü From 2003 to the present: The era of inbound marketing (two-way communication)

The first anti-spam law was signed in 2003 in the United States, and between that year
and 2004, three large social networks were launched: Linkedin, MySpace and Facebook,
which presented another way to advertise products worldwide.

Google started customized searches based on a search history of an Internet user in
2005. A new version of Google Analytics was launched in the same year. Twitter was
created in 2006, and that same year Amazon reached sales of 10,000 million dollars,
multiplying this figure after three years to more than 25,000 million dollars.

Google launched real-time searches in 2009. In 2010 it was estimated that more than
90% of the e-mails sent were spam. 90% of homes in the United States had a mobile
phone which became an ordinary tool for the daily life of families. In 2011, one in two
Americans owned a smartphone. In 2011, Google launched Google Panda and Google+.
The cost of inbound marketing became less than 62% of outbound marketing.

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In 2012, business advertisers planned to increase their assets and profits on social
networks by 64%, and they were not wrong, because these were great ways to market
their products and services. That same year, there were already more than one hundred
million users of smartphones and more than fifty million users of mobile tablets.

Viewers of online videos reached 169.3 million in 2012. There were 184.3 million online
buyers that same year. In 2013, 25% of visits to YouTube were made through mobile
devices. In February 2014, Facebook announced the purchase of the WhatsApp
messaging service for 21.8 million dollars and in 2016 WhatsApp users surpassed the
staggering figure of 1000 million users, that is, one in every 7 people in the world uses
this social network.

REMEMBER…

MARKETING
Definition of the American Marketing Comments
Association (1985)
The process of planning and executing - Development of activities of
the conception, pricing, promotion and analysis, planning, organization
distribution of ideas, goods and services and control.
to create exchanges that satisfy - Product upon which the
individual and organizational objectives. marketing action rests.
- Dual benefits: mutual
satisfaction. Advertiser and
buyer.

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1.2 MARKETING VARIABLES (4 P’S)

Marketing, as mentioned before, is a science or discipline that seeks to attract and retain
the users of a product or service by satisfying the needs of customers. For this reason it
constantly studies the situation of the target market.

In the 1950s, Professor Neil Bourden of the Harvard Business School stressed the
position of the Marketing Manager of the entire organization, creating the Marketing
Mix as a fundamental strategy, with the aim of specifying objectives and in this way
creating closer connections with users.

The concept pointed out above, Marketing Mix, is a set of components by means of
which a company, enterprise or product manages to influence the customer’s decision
whether to buy a service or not. There are twelve variables developed by Bourden,
which are as follows: Product Planning, Price, Brand, Distribution Channels, Sales
Personnel, Advertising, Promotion, Packaging, Exhibition, Service, Distribution and
Research.

Marketing is always in a continuous process of evolution. In the late 1950s, Jerome
McCarthy, a professor of marketing at Michigan State University, narrowed these
variables from twelve down to four. They are widely known as the 4 P's of Marketing:
Product, Price, Place (or Distribution) and Promotion.

§ Product
Products are fixed assets, items or services that are offered to a market to meet the
desires and demands of the customers.

A product constitutes a set of particular characteristics and benefits that the consumer
receives when the product or service is purchased. It should have a number of well-
defined features such as colour, size, use and life span, etc. The product life cycle

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depends on the user and the competition that exists in the market, which is summarized
in four phases:
1. Launch
2. Growth
3. Maturity
4. Decline

§ Price

A series of items is needed to set the price of a product or service, such as distribution,
discounts, guarantees, rebates, etc. It is necessary to determine the total cost that it will
represent for the consumer.

Determining the price of products is essential for carrying out correct manoeuvres and
tactics, since the price indicates what kind of audience the product or service is intended
for. One should keep in mind that price, whether you want it to or not, reflects the value
that the product or service has for the customer. The higher the price is, the better the
product or service will be and normally it will be destined for users with a higher
economic status.

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To define the price of our product or service we should ask ourselves the following
questions:
- How much will consumers be willing to pay for the product or service?
- How much is the product of the competition?

§ Place (Distribution Channels)

It is essential to know what the ideal locations are to turn potential customers into real
ones. Place indicates where the product is sold and how it gets to the market. For a
product (not for a service) a choice between wholesale and retail distribution needs to
be made.

There are many issues that need to be addressed and many questions that need to be
answered when it comes to distributing a product or service. The key is a deep
understanding of the target market which is necessary for discovering the most efficient
positioning and distribution channels.

Distribution is one of the most important factors when launching and selling a product.
Let us take as an example the first pizza chain that offered home delivery service. This
pizza chain turned distribution into the biggest advantage over other pizza restaurants
or companies. It contributed significantly to boosting sales of their pizzas. Later, all (or
almost all) pizza restaurants would follow its example when it came to distributing their
pizzas.

§ Promotion

The basis of promotion is the following:
1. Communication
2. Information
3. Persuasion of the customer about the company and what it offers.
4. Bargains, products offered, guarantees, etc.

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Promotion is comprised of various elements like:

1. Advertising
2. Sales Promotion
3. Sales Force
4. Public Relations
5. Interactive communication through media such as the Internet or television.

Needless to say, promotion is a crucial component of marketing as it may significantly
boost brand recognition and sales.

When the product or service is ready to be sold and at the disposal of consumers, it
should satisfy customer needs and bring profits for the company. It is the moment for
SELLING it.


1.3 MARKETING PLAN AND ITS STAGES

§ What is a Marketing Plan?


When we talk about planning in the company, we refer to planning in a general sense
and within this general concept is the Marketing Plan.

According to Dr. Philip Kotler, the Marketing Plan is a written document that outlines
the objectives, strategies and action plans related to the elements of the Marketing Mix,
which will facilitate and make possible the fulfilment of the strategy gradually
formulated in the corporate environment.




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The Marketing Plan should be structured in such a way that no information is overlooked
and that all the points are expressed in a logical way.

Planning is to decide in the present what will have to be done in the future; to draw up
a work plan, a project.

The business environment that companies need to face is becoming increasingly
competitive; therefore, marketing planning is essential for surviving in the market.

Some advantages that planning entails:
✓ The company's efforts will be better coordinated.
✓ Goals can be better defined.
✓ The company will be better prepared in the face of rapid development.
✓ It enables a great interaction in the control functions, which will facilitate
teamwork.
✓ It serves as a map/guide.
✓ It is useful for controlling management and implementing the strategy.
✓ It allows obtaining resources for the execution of the Marketing Plan.
✓ It comes in handy when detecting serious threats and future opportunities for
the company.

If we analyse the general marketing planning we will see that there are five types of
plans, which set a path for business activity. These plans are the Financial Management
Plan, Personnel Plan, Production Plan, Procurement Plan and Marketing Plan.

In order to carry out the Marketing Plan, the company should have a carefully prepared
medium- to long-term Marketing Plan. The first step of its preparation is to clearly define
the strategic plan, that is, a set of statements that establish the direction of a company
or work unit.

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§ Stages of the Marketing Plan

Although it has a wide range of possibilities, the Marketing Plan can be divided into
these standard stages:

1. Introduction: Executive overview
2. Analysis of the situation
3. Objectives
4. Development and selection of strategies
5. Action plan
6. Establishment of the budget
7. Control methods

1) Executive overview

It is a synopsis of the Marketing Plan. It includes the definition of the product or
service that you want to market, its advantages over the competition, the
investment needed and the expected results.

This overview should be brief. However, keeping it short should not diminish its
importance. That couple of pages needs to include a summary of the content of
the whole plan, as well as general strategies that are going to be carried out. It is
useful for Management as they can get a general idea of the Marketing Plan.

2) Analysis of the situation

The marketing area of a company is one of the most important areas because it
carries the mission of the company, which should be communicated by senior
management, and it should indicate the corporate objectives, the business the
company is in and the market it wants to reach. This will be the framework for
drafting the Marketing Plan. Once the general framework has been developed,

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the basic data should be stored, analysed and evaluated so as to adequately

prepare the plan and have a vision of the past and present.

It is one of the most important parts of the Marketing Plan because of the large
amount of information it provides. In this phase the following types of analysis
can be distinguished:

- Historical analysis. It involves the study of the most significant past
developments in marketing from which quantitative and general sales estimates,
product participation quota, product rotation levels, etc., can be deduced.
- Causal analysis. It seeks to identify and understand the reasons that define the
positive or negative results in the objectives that have been set out. The ability
to respond to unforeseen actions and movements of the competition is
appreciated.
- Analysis of the behaviour of the sales force. It refers to the true promoters of
the achievement of business goals. A detailed analysis should be carried out at
the geographical level and at the delegation and individual levels.
- Market study. It aims to identify the limits of the market and to study the
characteristics of customers or potential customers, needs and desires, purchase
potential, supply and demand, etc.
- SWOT analysis. It is a strategic planning tool that helps to identify the strengths,
weaknesses, opportunities and threats of a company and its competition. It
provides an overview of the current situation and possible future.

3) Determination of objectives

Marketing objectives are defined according to hierarchical criteria, that is to say, they
are oriented and restricted by the business unit objectives that are determined by global
or corporate strategy.
They are a central point in the organization of the Marketing Plan, because everything
that anticipates them leads to the determination of them, and everything that pursues

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them leads to the achievement of the objectives. They will determine where the
company wants to go and how it wants to do it. However, marketing objectives need to
be coherent with the general Strategic Plan that has been drafted from the beginning.

The volume of sales and the collaboration of the market with the lowest possible risk
should be set together with the objectives. The objectives should be:

- Feasible. They are achievable, practical and realistic.
- Specific and accurate. They are coherent with the company's rules.
- In time. They are adapted to a work plan.
- Agreed to. They are in line with company policy; they need to be accepted by
each and every department of the company.
- Flexible. They adapt to the needs of the company at the given moment.
- Motivating. They provide achievable challenges and, therefore, motivate the
departments and workers of the company

There are three types of basic objectives:
1. Positioning objectives
2. Sales objectives
3. Viability objectives

These objectives can be divided according to whether the results that have been
researched are short or long-term, or whether they are objectives that with the passage
of time will give better results, even if they are very long-term.

The objectives can be:
- Quantitative. They are related to hunches, benefits, attracting new
consumers, retaining consumers, etc.
- Qualitative. They refer to the improvement of the image, better
recognition, quality of products and services, professional improvement of
the sales, originality, etc.

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4) Development and selection of strategies

Strategies are the available lines of action that allow a company to attain the proposed
objectives. When preparing the Marketing Plan, objectives have to be clearly defined so
that a company has an edge in the marketplace and over the competition. This way, it
can achieve a better profitability of commercial resources.

At the same time, it should be taken into account that the strategy of the Marketing Plan
needs to be in line with the basis of the SWOT analysis, that is, the strengths and
weaknesses, opportunities and threats that may exist in the market, as well as in
accordance with internal and external factors involved, and the company's corporate
guidelines.

The process to follow in order to choose strategies is based on:
- The description of the target audience which you want to reach.
- The general synopsis and specific goals of the different marketing variables.
- The calculation of the budget.
- The overall evaluation of the Marketing Plan.
- The choice of the person in charge of the Marketing Plan

The establishment of the objectives and strategies of the Marketing Plan needs to be
carried out under the supervision of the CEO of the company. This is the most
appropriate way to build a real and strong commitment to them.

Most of the staff of the company should know about them, because if they know where
the company is going and how it is carried out, they will feel stronger and more engaged.
In short, all the necessary information needs to be given so that both managers and
employees know and understand the global state in which they are working.

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5) Approach or Action Plan

If you want to be consistent and faithful to the designated strategies, an action plan will
have to be implemented in order to achieve the proposed goals within a given time
frame. All the goals are attainable from the action of different assumptions of strategy
and each of the objectives or goals requires the action of a number of strategies and
tactics to achieve them. These strategies specify the precise operations that have to be
carried out in order to obtain the “fruit” of the tactic. This will involve having different
resources (human, technical and economic) able to successfully carry out the Marketing
Plan.

Different strategies that are carried out in the Marketing Plan will be included in the
Marketing-mix, and different tactics combined with the marketing variables will be
presented.
- About the product: cancellations, changes and information about new products,
services and ideas; appearance of new brands, product expansion, quality
improvement, new packaging and sizes, etc.
- About the price: analysis of the current rates, changes in the policy of promotions
and discounts, incorporating rebates, etc.
- About the distribution channels: selling through the network, retailer support,
reaching agreements with wholesalers, creation of new channels, stock policy,
improvement of delivery time, outsourcing of transport companies, etc.
- About the commercial organization: presentation of tasks, obligations and
commitments at different commercial levels, the increase in or adaptation of
personnel, changing areas of sale and routes, remuneration and incentives for
representatives, order procedure and order fulfilment, etc.
- About integral communication: press team contract, improvements on the
website, creation of media plan and adjustments, determination of budgets and
prices, promotional campaigns, direct marketing policy, presence of the
company and their products on social networks, etc.

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It is of utmost importance to stress that the strategies need to be coherent with the
marketing strategy which they should support, and with the commercial resources
available in the agreed period of time. The accuracy of strategies carried out for the
completion of the strategy as well as the positioning of goals and tactics will be the
responsibility of the Director of the Marketing department of the company. The human,
material and technical resources used to carry out the Marketing Plan need to also be
pointed out. Moreover, we need to place emphasis on the responsibility of each person
participating in the plan, and the specific tasks that each person needs to perform,
monitor and incorporate into a common task.

6) Establishment of the budget

The budget specifies all the forms of carrying out the tasks defined previously. Its
sequence of spending will be performed according to the work plans and time applied.

Managers, in order to give the green light to the Marketing Plan, will have to be aware
of the amount of the effort made, reflected in economic terms.

7) Methods of control

Control is the last requirement in the Marketing Plan. It allows keeping tabs on the level
of achievement of the targets while the tactics and strategies presented are being
adapted. Monitoring the progress helps to find possible errors, apply solutions to the
problems and take appropriate measures in the minimum time possible.

Appendix 7.1 shows an example of a Marketing Plan.

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